Memphis, Tenn.-based paper and packaging giant International Paper said Monday that it would acquire the pulp business of Federal Way, Wash.-based Weyerhaeuser.
The deal is valued at $1.9 billion, including a $300 million tax benefit, and is expected to close in the fourth quarter.
Weyerhaeuser's pulp business employs about 1,900 workers in Mississippi, Georgia, North Carolina, Canada and Poland.
International Paper (IP) said it expects to save about $175 million annually in "synergies" — business lingo often used to refer to cost cuts, revenue improvements and savings from combined purchasing power — by the end of 2018.
International Paper, which had $22 billion in revenue in 2015, has about 55,000 employees in more than 24 countries.
"Weyerhaeuser's pulp business has an outstanding customer base served from low-cost, well-run assets that complement our existing system and offers significant synergy opportunities," International Paper CEO Mark Sutton said in a statement. "This transaction will position us as the premier global supplier of fluff pulp and will enhance our ability to generate additional free cash flow."
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